Saturday, September 10, 2011

Capitalism 2.0

Or perhaps "New Capitalism."

This was the name we came up with at the end of Thursday night's Virtually Speaking. Jay and Stuart we arguing for rehabilitating capitalism with regulation and some direct governmental programs like health care. I suspect we are past trying that trick again, but maybe if we start in that direction, we will end up with something worthwhile. Anything has to be better than continuing as we have.

So what is Capitalism 2.0? Well, Jay and Stuart didn't say. So I'm going to croak something out.

First, comprehensive regulation of banking on Keynesian lines, by which is meant regulation of "any institution that borrows short-term and uses the funds to make longer-term, illiquid investments" (Krugman, "The Profession and the Crisis," link.) This is not quite, as Keynes suggested, "euthanasia of the rentier" (Keynes, The General Theory, link), but it is the domestication of the rentier.

Second, comprehensive national regulation of limited-liability business organizations, corporations. The legal recognition that legal artificial persons are different from natural persons, and have only the rights granted by law and charter.

Third, creation of new social institutions:

A highly-regulated comprehensive health care system.

Unions, not as an adjunct to commercial corporations, but as full partners in corporate operations.

Environmental protection organizations at all levels of government.

Now, this is a very broad-brush program, and a very radical one. Every element is subject to rethinking, and I would very much like input from Jay and Stuart, as well as experts in the fields covered.